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Tuesday, July 8, 2008

F&N Buys Allco Reit Stake, Manager For US$132m

Source : The Business Times, July 8, 2008

Singapore conglomerate Fraser and Neave (F&N) said on Tuesday its property unit has bought 17.7 per cent of Allco Commercial Reit and all of the real estate investment trust's manager for $180 million (US$132 million).

Fraser's property unit Fraser Centrepoint said in a statement it would buy 125.6 million shares in Allco Reit for $0.83 per share, and drop earlier plans for the listing of a commercial property trust

Fraser Centrepoint plans to rename Allco, which is a unit of troubled Australian asset manager Allco Finance Group, to Fraser Commercial Trust following the acquisition.

At 0152 GMT, shares of Allco Reit climbed 7.8 per cent to a six-day high of $0.77 with almost two million shares changing hands, while its parent Allco jumped 11.6 per cent in Australia.

F&N shares were up 0.2 per cent.

'Fraser Centrepoint...will be able to assist Allco Reit in negotiating the refinancing of its existing loans, which will bring clear benefits to Allco Reit's unitholders,' Fraser Centrepoint chief executive Lim Ee Seng said in a statement.

Singapore's real estate investment trusts are expected to go through a round of mergers and acquisitions this year as weaker players find it increasingly tough to raise funds and refinance loans.

Fraser Centrepoint said it plans to grow Allco Reit by injecting a pipeline of its commercial property worth $700 million, which was initially identified for its own Reit.

The company has a listed Reit for its retail properties, Frasers Centrepoint Trust, and said it intends to list a third Reit comprising serviced residences in two to three years, depending on market conditions. -- REUTERS